Etihad Airways, the national airline of the United Arab Emirates

14 Oct 2014 11:30

• Total revenues increase to US$1.8 billion during third quarter of 2014
• Passenger numbers grow 30 per cent to 3.9 million between July and September to outstrip capacity increase
• Available Seat Kilometres up from 19 billion in Q3 2013 to 22 billion in Q3 2014
• Etihad Cargo achieves 16 per cent growth in revenue for the quarter

Etihad
Airways, the national airline of the United Arab Emirates, today reported total
revenues of US$1.8 billion for the third quarter of 2014, an impressive
increase of 29 per cent year-on-year, achieved on the back of accelerated
passenger and cargo growth during the summer.

A
total of 3.9 million passengers travelled with Etihad Airways between July and
September this year, 30 per cent higher than the three million passengers from
the same period in 2013. Etihad Cargo also outperformed the global market,
carrying 144,498 tonnes of freight and mail during the third quarter, a
year-on-year increase of nine per cent, on only one per cent capacity growth.

The
growth in passenger demand and revenue during the three month period once again
outstripped the airline’s capacity increase, highlighting the strength of its
long-term growth strategy. Etihad Airways remains on track to achieve its
strongest ever annual results, having carried 10.5 million passengers and almost
415,000 tonnes of cargo between January and September 2014.

James
Hogan, President and Chief Executive Officer of Etihad Airways, said: “Our
focus on organic growth, codeshare partnerships and minority investments in
other airlines has continued to produce strong results, despite the prevalence
of industry challenges such as volatile oil prices, economic and political
instability, overcapacity in the market, and access constraints.

“We
are confident about sustaining our profitability in 2014 and there are a number
of important milestones in the final quarter, including the entry into service
of Etihad Airways’ ground-breaking Airbus A380 and Boeing 787-9 Dreamliner in our
striking new livery. These aircraft will feature our next generation First,
Business and Economy Class products, together with The Residence by Etihad™, the
world’s first three-room private cabin. In addition, we will introduce Phuket,
San Francisco and Dallas into our network over the remainder of this year.”

Following
the launch of services to Medina, Jaipur, Los Angeles and Zurich in the first half
of 2014, the third quarter included the start of Yerevan, Perth and Rome
services, while frequencies increased on eight existing routes, including Dublin,
Athens and Chennai. The airline’s global route network currently includes 110
existing or announced destinations, with flights launching to Phuket this month,
San Francisco in November, and Dallas in December.

Organic
growth was supported by codeshare and equity partnerships in the third quarter
of 2014, delivering an estimated 1.1 million passengers onto Etihad Airways
flights (+41 per cent year-on-year) and contributing revenue of US$352 million,
which represented 27 per cent of the airline’s passenger revenue. During this
period, a new partnership agreement was signed with Philippine Airlines (PAL),
covering codeshare flights, loyalty programs, airport lounges, cargo, and coordination
of airport operations. Etihad Airways also expanded existing codeshares with partners
such as Korean Air, KLM Royal Dutch Airlines, Air New Zealand and S7 Airlines.

Etihad
Airways and Alitalia signed a transaction implementation agreement in August
2014, which, subject to regulatory approval, will result in a €1,758 million
investment to build a reinvigorated Alitalia. This includes a €560 million
investment by Etihad Airways to acquire a 49 per cent shareholding in Alitalia,
a 75 per cent interest in Alitalia’s loyalty company, which operates the
MilleMiglia frequent flier program, and five pairs of slots at London’s Heathrow
Airport, which will be leased back to Alitalia on an arm’s length basis. Etihad
Airways’ investment will be complemented by a €300 million investment from
existing core Alitalia shareholders, up to €598 million in financial
restructuring of debt, and €300 million of new loan facilities.

Etihad
Airways’ passenger carrying capacity, measured in Available Seat Kilometres (ASK), was 22 billion by the end of Q3 2014, an
increase of 16 per cent over the same period last year. The airline’s fleet
expanded to 105 aircraft, with three aircraft delivered in the third quarter.

An
additional five aircraft are scheduled to be received in the final quarter of
2014, including Etihad Airways’ first Airbus A380 and Boeing 787, which
commence operations in December and will feature brand new First, Business and Economy
Class products. The A380 will also include The Residence by Etihad™, a
three-room private cabin that boasts a living room, separate double bedroom and
ensuite shower, together with a personal butler service.

Etihad
Airways unveiled a new livery design last month, which will be introduced
across its fleet, starting with the A380 and B787. The livery is inspired by
traditional Emirati design patterns, the landscapes of the desert, and
geometric shapes found in the modern architecture of Abu Dhabi.

In
the third quarter of 2014, Etihad Cargo optimised scheduling and connections
globally, launched new freighter services to Moscow and Hanoi, increased
frequencies on its existing freighter route to Milan, and deployed a new
A330-200 Freighter. A specialist equine service was also unveiled for the
transportation of horses and other similar species by air. The ‘SkyStables’
service is being rolled-out across Etihad Cargo’s scheduled network of 44
freighter destinations, with personalised charter services available to other
cities around the world.

Cargo
revenue was US$284 million in the third quarter of 2014, a year-on-year
increase of 16 per cent. Etihad Cargo remains on track to become a billion
dollar business in 2014, having reported US$804 million in revenue during the
first three quarters of the year.

Etihad
Airways’ workforce grew to 22,886 employees by the end of the third quarter, up
38 per cent year-on-year. Part of this significant increase can be attributed
to the airline’s acquisition of Abu Dhabi Aircraft Technologies LLC (ADAT) from
Mubadala earlier this year.

Within
the core airline, 1,716 employees are UAE nationals, 28 per cent more than the
same period in 2013, and Emiratis are the number one nationality group at manager
level. Last month, Etihad Airways announced plans to establish a dedicated
Revenue Accounting Centre of Excellence in Al Ain, which will create job
opportunities for more than 1,000 Emiratis over the next three years and create
long-term economic value for the Emirate of Abu Dhabi. The centre will be a
global leader in revenue accounting, offering a range of competitively priced
services that will bring cost savings and operational efficiencies to airlines,
including Etihad Airways.